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EDITORIAL: Pricey fuel isn't all bad: Pain at pump creates opportunity

May 19, 2008

Pricey fuel isn't all bad Pain at pump creates opportunity The high cost of fuel hurts everyone, from commuters to business owners to not-for-profits whose volunteer drivers deliver meals to shut-ins. Our whole economy suffers. But there's a silver lining to gas for $4 a gallon: opportunity. If the price of fuel isn't coming down, and that seems to be the prevailing wisdom, the only thing to do is adapt. It's in adapting that there's opportunity to be found and money to be made. As Gov. Mitch Daniels said last week at a meeting at IBJ, there's not one solution to the high cost of fuel. Ultimately, we'll have to pursue a variety of approaches to maintain our standard of living and keep our economy moving in the right direction.

Fortunately, Hoosiers are getting with the program.

Last week, IBJ reporter Chris O'Malley wrote about a $100 million venture capital fund being raised here for the purpose of investing in clean-technology firms. Clean Wave Ventures founders Scott Prince and Rick Kieser think soaring fuel costs will draw investors to alternativeenergy firms and others that engage in green research.

It's already happening. According to the Indiana Department of Agriculture, there are four biodiesel and 16 ethanol plants either operating in Indiana or on the drawing board, only one of which was here four years ago. Those facilities represent $2 billion in investment and are expected to create 700 jobs.

So far, however, corn- and soybean-based fuels haven't turned out to be an economic home run. That's why researchers at Swift Enterprises at the Purdue Research Park are developing a general aviation fuel made from plant byproduct. Others are working on fuels that can be made from animal waste. Indianapolis-based Enerdel Inc. is going another route, making lithium-ion batteries for use in hybrid cars.

In Benton County, one plant is already operating that turns wind into electricity. Indianapolis Power & Light just struck a deal to buy wind power from another facility that's in the works. Wind farms could someday spawn manufacturing operations here. The mammoth towers and blades that they require are expensive to ship long distances, so the components are often manufactured near their final destination.

Businesses pursuing sexy new technology aren't the only ones that stand to gain from high fuel prices. Greenwood-based Casting Technologies Co., for example, makes lightweight automotive parts that improve vehicle fuel efficiency. In response to increased demand from automakers, the company is finishing a $3 million plant expansion and plans to add 40 employees this summer

Of course, not all these endeavors will work in the long run, but some will endure and entire industries will spring up around them. With the high price of fuel forcing our hand, we can emerge with a cleaner, greener economy liberated from its dependence on foreign oil. And those who are creative and industrious will make money along the way.



To comment on this editorial, write to ibjedit@ibj.com.
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